Each year we here at PTN ask the movers and shakers in our industry to give us their views on the current state of the industry and their predictions for the coming year.
This time last year, the buzz surrounding our annual state of the industry polling was that digital had finally arrived, was being fully accepted by all, and the most important point to take away was that the next step would be all about educating the consumer.
Education is a very large part of the imaging industry in 2006—educating consumers on how to use these new digital cameras... teaching the digital unsavvy that they need to perform some sort of backup of their digital images, whether its by printing, burning to Cd/dVd, or on external media—but that they can’t rely on just the computer hard drive or media card alone... educating digital camera owners that they need to print at retail for the best quality available... And alerting today’s digital shooters— amateur and pro alike—that there are so many creative options to utilize the billions of digital images that are being captured.
Another trend on the horizon is the addition of new digital gaming and gadget products, hd televisions, and more, filling more space on the shelves of the big box electronics retailers. For the photo specialty retailer who can offer a full line of digital cameras and accessories, you can leverage the fact that you specialize in digital imaging—and in the sales of digital cameras. And the staple of the independent retailer—your high level of customer service is becoming more important than ever to consumers. innovative marketing ideas, thinking outside-the-box, and growing your range of offerings to include creative uses for photography are what will allow retailers and lab owners to increase revenue.
Consumers have had a taste of what digital will be able to offer in the future. As digital product features converge there will be even more excitement surrounding how images are used: cellphones with cameras, cameras with MP3 players, MP3 players that can store photos, digital photo albums that can store documents, and much more to come.
Offering Your Customers An “Experience”
Christopher Chute, research manager Worldwide Digital Imaging Practice
The future of photofinishing lies with offering customized photo merchandise like calendars, greeting cards and other products consumers can create themselves. The battle for photo dealers will be over how strong of an experience they can offer consumers, who will be pulled by competitive offerings into doing this from home instead of retail. Dealers need to move away from the commodity printing business model of printing thousands of 4x6s, and create a “Starbucks”-like atmosphere that will generate repeat business.
On the camera side, look for less expensive DSLRs offered for average consumers, a push to offer real optical image stabilization up and down the digital camera category, and additional old-school photography brands to pull out of the market or get acquired. IDC expects that the U.S. camera market will grow 8% this year to 31 million units, despite any economic volatility. Digital cameras, driven by strong promotions, will continue to be a favorite holiday item.
Monetizing the Entire Digital Imaging Ecosystem
Ed Lee, director, Consumer Services and Digital Photography Trends Service
Photography is undergoing an evolution. Historically, the art of photography has revolved around the capture of images on silver halide film and the printing of those images on silver halide paper. The days of silver halide photography are now numbered. Digital photography is rapidly replacing film and has enjoyed tremendous growth over the last several years.
We are beginning to see a move away from the film replacement model to one that begins to take true advantage of the “digital” nature of images in an interconnected world. There is so much more to digital imaging than capture and print, with opportunities for viewing, sharing, editing, managing, searching, and the preservation of images. Together with the long-established functions of image capture and output, they form a digital imaging ecosystem, in which the image is the center of the universe.
InfoTrends believes that increasingly, the monetization of imaging will happen beyond the two traditional endpoints of capture and print. We’ll be working on a study this Fall that explores the emerging opportunities. Whoever owns both access to and management of consumers’ images will ultimately influence what people do with their images and where and how they monetize them. We expect that in 2006 and 2007, equipment vendors, service providers, and retailers will begin looking at the other components of the imaging ecosystem for future growth opportunities beyond digital still cameras and photo printers. It remains to be seen which products and services will emerge as winners, but it’s our hope that continued collaboration within the industry will lead to more consumer-centric solutions, ones that accelerate the ease with which people can share, preserve, and enjoy their memories.
The NPD Group
Create the Picture-Perfect Imaging Oasis
Liz Cutting, Senior Imaging Analyst
The imaging industry survives on people’s desire to forge visual memories. Retailers help create and perfect photos on a personal level by showing their customers they care about photography. That is where the specialty photographic retailer comes into play.
Within the maelstrom of over 800 digital camera models available and an expected 29.5 million units to be sold in 2006, the specialty dealer must invest carefully. One-in-five digital cameras sold this year has been at a Wal-Mart and a rising number of buyers earn household incomes of less than $30,000. Still, buyers with household incomes over $100,000 continue to be more significant, representing 27% of all purchases in 2006. NPD consumer data reveals that 19% of digital camera dollars spent by households earning $100k+ were at a photo specialty store this year, versus just 11% of those earning less than $100,000.
NPD sell-through data shows that a best-selling digital camera purchased at a photo specialty store typically costs no more than at an electronic specialty store. But like frequent flyers who willingly pay a premium for the luxury of a separate airline lounge, affluent photography consumers are more likely to be loyal to and pay more for services at a store designed as an oasis of quality imaging. Outside of a chaotic superstore world, the specialty retailer can cater to these consumers with personalized service. The reward will be a greater monetary return and more referrals, guaranteeing repeat business in cameras and especially higher margin accessories and services.
Provide Consumers With that Something “Extra”
Ted Fox, Executive Director
Today’s photo imaging industry consumers are much more demanding than in the past. They’ve read the reviews, done the research on the internet, and have shopped a dozen websites before coming into the photo retail store. The challenge is to provide that something “extra” that will get them in to the store, and get them to buy.